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TAX
TAX
by QUESADALAD » Tue Dec 13, 2016 7:51 pm
Hi,I wonder if anyone is or has had a letter from there bank.building society, in my case (Nationwide) regarding where you pay taxes etc,We are resident in Spain,but the only money we receive are State Pensions ,my wife and i.which are both taxed in the UK,I also receive a private pension which is also taxed by my former employers, we have a current account with Nationwide and a savings account with no more than £10.000 in it,my question is do i have to pay tax here in Spain or because i am already been taxed in the UK that is it,We get nothing from the spanish authorities and indeed only put money into there economy.Im told that you only pay tax in 1 country.any information would be appreciated.
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Re: TAX
by marcliff » Tue Dec 13, 2016 8:04 pm
Bit wrong there. You must declare all worldwide income on a tax return in Spain if you are a resident. You should only pay tax at source on some government pensions (civil service, police, forces etc) for which you will be taxed in UK and have no choice. State pensions (old age pension) are not taxed in UK but are liable for tax in Spain. Same with interest on bank accounts etc. Any non-government pensions and savings interest should be paid free of tax in UK.
All income should be declared and the tax is worked out on all of it. Any tax paid in UK (under the dual tax system) will be offset against any tax you paid in UK but you are, in effect, claiming two lots of tax allowances, the one in UK and the one in Spain which they are clamping down on.
As a resident, you cannot pick and choose which country you pay tax to and it must be declared in Spain.
Be careful because the UK and Spain have signed a collaboration agreement regarding income and taxes.
All income should be declared and the tax is worked out on all of it. Any tax paid in UK (under the dual tax system) will be offset against any tax you paid in UK but you are, in effect, claiming two lots of tax allowances, the one in UK and the one in Spain which they are clamping down on.
As a resident, you cannot pick and choose which country you pay tax to and it must be declared in Spain.
Be careful because the UK and Spain have signed a collaboration agreement regarding income and taxes.
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Re: TAX
by marcliff » Tue Dec 13, 2016 8:51 pm
I should qualify the above by pointing out you can't be taxed on the same income twice. If you have a government pension which is taxed at source in UK, you won't be taxed on it but it will be taken into account when working out your tax allowances in Spain. eg. 15000 in UK and taxed government pension. 6000 state pension which is not taxed. You will already have received the tax allowance on the government pension and paid tax on it but you will be liable for tax on the state pension as you have already used an allowance.
Our solicitors charge us €135 a year (for a couple, not each) and handle all our fiscal queries including tax. All I provide are the annual P60s (showing income and tax paid in UK) and interest certificates from the UK bank.
Our solicitors charge us €135 a year (for a couple, not each) and handle all our fiscal queries including tax. All I provide are the annual P60s (showing income and tax paid in UK) and interest certificates from the UK bank.
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marcliff - Posts: 9694
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Re: TAX
by QUESADALAD » Wed Dec 14, 2016 5:43 pm
Thanks everyone, so we are saying that everyone that receives a state pension need to disclose this.you hear so many stories.
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Re: TAX
by marcliff » Wed Dec 14, 2016 6:06 pm
QUESADALAD wrote:Thanks everyone, so we are saying that everyone that receives a state pension need to disclose this.you hear so many stories.
That's why you need a good fiscal adviser. Someone who won't just give stories. Rules have changed and do so quite often. Government pensions, at one stage, didn't have to be declared. Now you declare them but they are not taxed because they are already taxed at sourced in UK. However, about 3 years ago now, Cameron and Rajoy signed an agreement to say that government pension can be taken into account when calculating the tax level. You no longer get the UK tax allowance and the Spanish tax allowance.
For example, if you have a government pension of 10,000 in UK, no tax will be taken as it is within the allowance. Neither would you pay tax on it in Spain. However, if you have a state pension of 6,000 in UK, then Spain will add both together to see which level of tax you pay. You will not be taxed on the 10,000 but you will pay tax on the 6,000 at the level you would if earning 16,000 a year. If you've paid tax in UK then that will be taken off your liability in Spain.
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marcliff - Posts: 9694
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Re: TAX
by QUESADALAD » Wed Dec 14, 2016 6:18 pm
Thank you so much Marcliff, that makes it a lot clearer a visit to a advisor is required i think thanks again.
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Re: TAX
by pixie » Wed Dec 21, 2016 10:03 pm
Hi, can anyone please recommend an abogado to assist with our HM Revenue & Customs UK Self Assessment Tax Returns. Been online to the Government Gateway website, registered and got activation codes but, maybe it's us, we find it confusing and so don"t want to get it wrong.
We are however up and running as far as the Spanish Tax returns system goes.
Many thanks in advance for any input all gratefully received.
We are however up and running as far as the Spanish Tax returns system goes.
Many thanks in advance for any input all gratefully received.
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- Which part of Spain are you from?: Quesada
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